The Food and Allied Workers Union (Fawu) intends to file a complaint with the Competition Commission on Thursday to block South African Breweries’ (SAB) plans to retrench hundreds of workers, says deputy general secretary Mayoyo Mngomezulu.
He said SAB was in breach of the merger agreement entered into by its parent company, AB InBev, and the commission in 2016 after its takeover of the local beer maker was finalised. The commission investigates abuse of dominant positions by companies as well as mergers & acquisitions.
The move is part of the union’s multipronged resistance to the looming job cuts at the beer maker.
SAB confirmed on Wednesday that it planned to lay off about 500 workers as part of a review of its operations “in light of the prevailing economic conditions in SA”. The company employs about 5,697 people.
SAB said the number of employees to be retrenched could be less after it placed some workers within the company. “It is only after the redeployment process that an accurate assessment of the numbers can be confirmed,” it said.
SAB is the latest company to lay off employees as SA battles a high unemployment rate. Stats SA’s quarterly labour force survey, released on Tuesday, showed that the country’s unemployment rate stood at 29.1% in the fourth quarter of 2019.
The Labour Relations Act provides for SAB and Fawu, which represents workers at the company, to hold consultations about possible job losses at the Commission for Conciliation, Mediation and Arbitration (CCMA).
SAB said the looming job cuts were not in contravention of the conditions AB InBev agreed to. As part of the merger deal, AB InBev agreed to a number of conditions, including that there would be no forced retrenchments in perpetuity in relation to the merger and that permanent employment numbers would be maintained for five years.
It defended its retrenchment plans saying “businesses need to constantly adapt to change to maintain efficient, sustainable and competitive organisations. In doing so, SAB will at the same time implement actions to identify growth opportunities that could create future employment prospects, thereby enabling SAB to return to its current level of employment.”
The company attributed the cuts to a range of factors outside its control. “These include regulatory uncertainty, above-inflation excise rates, as well as the prevailing trading conditions in the SA economy.”
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